This report presents lessons from Tanzania's development experience of the past four decades, with emphasis on the period since the last report (1996), and assesses the imperatives for higher sustained growth and better livelihood for its citizens in the future. The background papers review and assess Tanzania's actual growth and poverty reduction performance against its large natural potential and against countries at a comparable stage of development; analyze the main reasons behind the performance record; and outline the strategic and institutional imperatives for exploiting the country's vast potential for sustained growth and reduction of poverty in the long and medium term. Following the introductory and explanatory material and the background papers, the report is divided into seven parts: (1) "Background Information"; (2) "Review of Recent Macroeconomic Performance"; (3) "What Matters Most for Growth?"; (4) "Combating Poverty, Ignorance, and Disease"; (5) "Unleashing the Private Sector's Potential for Tanzania's Development"; (6) "Pacemakers for Sustainable Economic Growth"; and (7) "Performance of Zanzibar's Economy." (Contains extensive figures, tables, statistical appendixes, and 160 references.) (BT)